Shipbuilding holds out high promises

http://www.thefinancialexpress-bd.com/more.php?news_id=84142

Shipbuilding holds out high promises
Shahiduzzaman Khan

A ‘pragmatic’ policy for the shipbuilding industry is reportedly under consideration for attracting new investments and orders from abroad. The country has earlier witnessed some notable success in export of small ocean-going vessels.

In this backdrop, the government is also examining the possibility of setting up a separate export processing zone (EPZ) exclusively for the shipbuilding sector.

A visiting 21-member Danish business team is, according to reports in the media, looking for local partners and investment potentials of the country’s budding shipbuilding industry. At a function styled Denmark-Bangladesh Matchmaking Event at a local hotel, Danish business leaders expressed their willingness to invest their funds in this sector in Bangladesh. Earlier, a German business mission, while visiting Bangladesh, expressed its interest in forming a sustainable, long-term partnership in shipbuilding sector in Bangladesh.

Commerce Minister Faruk Khan announced at the Danish embassy function that the government would consider tax holiday facility for this potential sector. If the Danish companies invest in the backyard linkages of shipbuilding, the sector, as the minister did rightly note, will be able to save a sizeable amount of foreign currency by reducing dependence on import of machinery and equipment.

Like the case in garment industries, Bangladesh is largely dependent on import of equipment and accessories for the shipbuilding industry. If these can be manufactured locally, the domestic value addition content, out of export proceeds from ocean-going vessels, will be substantial. In fact, accessories for the shipbuilding can be made cheaply from places like Dholai Khal if some of its units are offered soft-terms loans at low rate of interest. Local entrepreneurs should, thus, be facilitated and encouraged to manufacture such linkage facilities for the shipbuilding industry.

Investing in Bangladesh has otherwise different advantages including that of cheap labour. In the past several years, two local shipbuilders bagged orders for making more than 50 vessels worth $600 million mainly from European buyers. Some of the ships have already been handed over to the buyers in Denmark and Mozambique. Nearly 200 shipyards and workshops, employing about 100,000 skilled and semi-skilled workers, are in operation to meet demand of this riverine country. Man-hour cost in Bangladesh is lower than any other shipbuilding nations. Ships built in Bangladesh, according to industry operators, are 15-20 per cent cost-competitive compared with countries such as China, Korea, India and Singapore.

Bangladesh has become a new home for making small ocean-going vessels; traditional shipbuilding nations such as South Korea and China are now focusing on constructing large ships. This has offered an opportunity to Bangladesh to tap its full potential in shipbuilding country. More local companies have already come on the scene. Reports say six Bangladesh business houses will invest Tk 5.0 billion within a year to establish shipbuilding facilities across the country. Such business groups, having expertise in real estate, steel and engineering works, have reportedly formed already separate firms and acquired land for their shipbuilding projects. The initiatives have been taken by some of such businesses to set up projects mainly in Narayanganj, Munshiganj and Chittagong.

Danish Ambassador Einar Hebogard, speaking at the matchmaking event in question, appeared optimistic about future of Bangladesh shipbuilding industry. For the last three to four years, he has been watching the shipbuilding industry with interest and was finally convinced that Bangladesh would fare well in this burgeoning business.

According to the baseline study done by the Danish embassy, 10 Bangladeshi shipyards are expected to become capable of building high quality international standard ships of up to 10,000 DWT within a year or two. Two shipyards have already made it on the international scene and have at present around 50 vessels in their order books from the Danish, German, Dutch and Finish buyers. The size of the contracts is valued at around of $500 million and a memorandum of understanding has been signed for an additional $200 million.

If the Danish know-how is combined with Bangladesh’s low labour costs and hard work in joint ventures or other forms of strategic partnerships, local companies will be able to acquire necessary skills and experience for shipbuilding industry.

However, the main strengths of shipbuilding in Bangladesh are its long history of maritime activity, presence of favourable geographical advantages, availability of a low-cost shipbuilding workforce and industry-related educational and training institutes, according to the study. The Danish embassy study found that significant government focus was placed on aiding the shipbuilding industry — green channels for duty-free market access and easy importation facilities have been created, besides a tax holiday in the making.

Bangladesh is believed to be 15 per cent cheaper in building small ocean-going vessels than its main competitors like Vietnam, primarily due to low labour costs. At present, Bangladeshi companies can manufacture around 40 per cent of the components for vessels built for local demand. With a vigorous marketing plan, the new breed of entrepreneurs will be able to obtain a large slice of the $400 billion global shipbuilding business. If that were done, this sector would play an important role in helping the country attain the status of a mid-income country within the stipulated time.

Shipbuilding is predominantly a technology-driven sector where constant improvement of engineering skill keeps one ahead of the others in competition. The government, on its part, will need to extend all-out support to the sector by framing a new policy so that it can brighten the country’s image, besides earning valuable foreign currency.

szkhan@thefinancialexpress-bd.com

Danish study finds shipbuilding 15pc cheaper in Bangladesh

http://www.thefinancialexpress-bd.com/more.php?news_id=83951

Danish study finds shipbuilding 15pc cheaper in Bangladesh

FE Report

The cost of building an ocean-going ship in Bangladesh is around 15 per cent less than in any other competitor countries, thanks to the cheap labour here, a study of the Danish Embassy said Monday.

Though the low labour costs cannot stand alone to lower the manufacturing costs, the study said the country might not compete with the countries like China, South Korea, India, Vietnam etc already dominating the secondary chain-supply industry.

According to the Danish study, the existing average labour wage per hour in Bangladesh is around US dollar 1.5, compared to $ 3.0 in a Chinese shipyard, $ 8 in South Korea, $ 16 in Italy and $ 18 in the US.

Bangladesh can supply only 10 per cent of the components required for building an exportable ship, but its support to the domestic inland and coastal vessel manufacturing is around 40 per cent, most of which is believed to be coming from small and medium enterprises (SMEs).

Though the cost of labour in shipbuilding is typically around 20-30 per cent of the total ship manufacturing costs, the study says the value of the local items could easily be raised to 70 per cent.

The productivity rate of Bangladesh is 1.0 with the estimated relative labour rate at 0.5 while the ratio stands at 1: 1.2 in India, 1:1.5 in China, and 6:4 in South Korea.

The Danish Embassy prepared the study on Bangladesh Shipbuilding Sector: Challenges and Business Opportunities prior to the visit of a high profile Danish business delegation, mostly from their shipbuilding industry, to find out joint venture business opportunities in Bangladesh.

The delegation, which arrived here Sunday, met Bangladeshi businesspeople at a meeting, titled “Denmark-Bangladesh Match-making event” Monday.

The study praised the contribution of the private sector to the sale of international oceangoing ships, which fetched half a million US dollars. It said four shipyard companies have already earned the full capacity of building ships of international standard.

Of the 200 shipyards, the study put Ananda Shipyard, Western Marine, Khulna Shipyard, and Karnaphuly Shipyard in the A category. Besides, Highspeed Shipbuilding and Engineering, Dhaka Dockyard, Narayanganj Engineering, Dockyard and Engineering, Chittagong Dry Dock and Fishers Shipyard have all been placed in the B category, which means these will be ready for constructing oceangoing ships in a year or two.

The study putting other shipyard companies in C and D categories said the country has the potential to develop 18 backward linkage industries, which include ship out-fittings, safety accessories, marine lighting, maritime signs, symbols and posters, piston rings, switch gear, furniture, marine cables, anchor and chain, electrical and electronic items, and shipbuilding steel plate.

While inaugurating the event at a city hotel, Commerce Minister Faruk Khan made a clarion call to the investors to take into account the country’s labour class and environment to make the investment fruitful.

He also called upon them to find more and more investment avenues including dredging and said the government has already taken necessary steps to create an investment environment for creating job opportunities for the poor segment of the population.

Danish Ambassdor Einar H Jensen, who led the country’s ship building sector revival by making international standard sea vessels, said Bangladesh’s ocean going ships are now doing well.

He said under the Business2Bussiness programme, 70 Danish companies have joint ventures with Bangladesh, mostly in information and technology.

The function, moderated by the president of Bangladesh Enterprise Institute Farooq Sobhan, was also addressed by Capt ATM Kamal from the local ship

Govt to examine special EPZ for shipbuilding: Faruk

http://www.thedailystar.net/newDesign/news-details.php?nid=113444

Govt to examine special EPZ for shipbuilding: Faruk
Star Business Report

The government will examine the possibility of setting up a separate export processing zone (EPZ) for shipbuilding sector of the country, Commerce Minister Faruk Khan said yesterday.

He also said Denmark will invest a huge amount in the shipbuilding sector of Bangladesh in the months to come.

The minister was speaking at a function styled Denmark Bangladesh Matchmaking Event at Westin Dhaka.

A 21-member Danish business delegation within the shipbuilding and fisheries sectors is in the city now to look for local partners and investment potential. Danish embassy has organised the function and the trip for November 8-15.

The minister said the government will also consider tax holiday facility for the potential sector.

He said if the Danish companies invest in the backward linkages of shipbuilding, the sector will be able to save the same amount of money by reducing import of shipping machinery and equipment.

Khan also called upon the delegation members to be careful about environmental and labour issues if they operate business in the country.

He urged the Danish businesspeople to invest in dredging sector also, as presently the country requires many dredgers to maintain its rivers’ navigability.

Danish Ambassador Einar Hebogaard Jensen said investing in Bangladesh has different advantages including cheap labour.

Investment cost is 50 percent lower in Bangladesh compared to other countries in the region including Vietnam, he added.

He also told the function that the first ship exported from Bangladesh to Denmark, Stella Maris, is now plying smoothly there.

Bangladesh Enterprise Institute President Farooq Sobhan and President of Bangladesh Shipbuilders’ Association Mahmudur Rahman also spoke at the function.

Danish ship builders in city

http://nation.ittefaq.com/issues/2009/11/09/news0041.htm

Danish ship builders in city

Staff Reporter

A delegation comprising 21 companies from Denmark arrived in the city to discuss with the local entrepreneurs for building ships considering the cheap labour markets in Bangladesh.

The Danish delegation will hold a meeting today with the representatives of 50 local ship-building companies in the country as the shipbuilding industry appears as a major export-earning sector.

With the development of this potential industry, the Danish delegation will hold extensive talks with the Bangladeshi entrepreneurs at hotel Westin today. Commerce Minister Faruk Khan will be present as chief guest.

Ship building in Bangladesh has evolved from traditional methods into a modern industry with a capacity of competing successfully in international markets.

The developments are encouraging in the country’s new and promising shipbuilding sector. Some ocean-going cargo vessels have already been exported by a local ship building company to Denmark and Mozambique.

European firms seek changes in BB rules for investment in shipbuilding

http://www.thefinancialexpress-bd.com/2009/11/06/83561.html

European firms seek changes in BB rules for investment in shipbuilding

FE Report

Bangladesh Bank must fine-tune its foreign investment regulations to woo large-scale investment in the country’s fast-booming shipbuilding sector, a high level European trade delegation said in the city Thursday.

The European Bangladesh Federation (EBF) made the observation at a roundtable with local entrepreneurs while expressing their eagerness to invest hugely in the country’s shipbuilding sector.

“Shipbuilding in particular is a highly potential industry in Bangladesh and this is a segment which the investors from Netherlands are keen to explore,” President of European Bangladesh Federation of Commerce and Industry (EBF) Jan Frederik Oldenhuizing said.

“However, the major prerequisites in facilitating investment in the sector are

reforms in the central bank regulations and elevating the country’s overseas image”, Oldenhuizing, who is also is the President of Bangladesh-Dutch Chamber of Commerce, added.

The Bangladesh Enterprise Institute (BEI) and Asian Tiger Capital Partners (AT Capital) jointly organized the meeting.

The event was part of a project initiated by BEI and AT Capital on “Establishment of an Effective Bangladeshi Diaspora Network for Economic Transformation of Bangladesh”.

The European delegation in the meeting said vessel making industry could emerge as the next big sector in Bangladesh as the country is criss-crossed with scores of big rivers and has bounty of cheap labour.

But the country must get rid of the policy and investment bottlenecks standing on the way to increasing European investment in the sector, they said, urging quick steps in this regard.

At the same time, the delegation also called for effective efforts for improving Bangladesh’ s image abroad, as the country is very often portrayed as politically unstable.

Earlier speakers in the meeting, focused on the advantages as well as challenges of investing in Bangladesh.

Partner of AT Capital Minhaz Zia who made a presentation on the investment opportunities in Bangladesh, highlighted the country’s competitive advantages including strategic location, cheap labour and demographic dividends.

President of BEI Farooq Sobhan in his speech stressed the need for skill enhancement and human resource development through transfer of technical skills from Europe.

Addressing on the occasion, Mr. Salahuddin Kasem Khan, MD, AK Khan Group, President of Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI), identified scopes for investment into logistics of ready-made garment sector.

Delegates from EBF in various sectors such as construction, investments, shipbuilding, design and engineering, finance, project consultancy and business development took part in the discussion.

Khulna shipyard sees profit after taking new venture

http://www.theindependent-bd.com/details.php?nid=148431

Khulna shipyard sees profit after taking new venture
UNB, Khulna

Nov 3: Khulna shipyard regained its lost glory as the potential venture turned into a successful profitable business concern through building brand-new ships of international standards besides repairing old ones.

Located on the bank of the River Rupsa, the shipyard was established way back in 1957 with the assistance of a German firm, Stulcken Sohn.  Two German and British companies had jointly run the shipbuilding yard till 1965.

After the independence, it was handed over to the state-run Bangladesh Steel and Engineering Corporation (BSEC) in 1972. But the shipyard started incurring loss after 1980.

Under the circumstances, the then government had decided to give it over to the private sector to boost production and business.

Considering the economic prospect, later on, Bangladesh Navy was given the responsibility of running the promising venture on October 3, 1999. Shortly after the makeover under a bailout plan, the shipyard started making a turnaround into a profitable enterprise.

According to sources in the Khulna Shipyard Limited (KSY) company, some 650 ships have been constructed and renovated while 1,800 repaired at the yard in last 47 years.

“The shipbuilding industrial unit is capable of building and repairing 2000-ton-capacity ships, but it cannot be done because of inadequate depth of Rupsa Channel (3.4-meter draft). Moreover, big ships cannot ply under the low-height Rupsa Bridge,” one of the sources told the news agency.

The KSY is now able to build modern patrol craft (warship), inland and coastal workboat, harbour/coastal and sea-bound tug, barge, ferry, landing craft, crane barge, hydrographic survey vessel, buoy-handling vessel, search and rescue boat, cargo vessel, tankers and other varieties of ship.

It has also the capacity for repairing war and commercial ships and providing technical assistance.

Also skilled in general engineering sector, KSY is now constructing electrical tower, trailer, iron tank, oil and water tanks, wagon and machinery used in jute and sugar mills. Besides, it built the newly innovated globe digester for paper mill.

As Bangladesh set foot on the international export market in a latest development in the highly prospective sector, the KSY management said they are now planning to build and repair big ships.

KSY managing director Commodore S Imran explained the expansion and upgrading plans. “New ships are built worldwide every 30 years, and now is the time to do. To avail this opportunity, steps have been taken to set up a forward base of the shipyard in Joymonir Khol area, downstream of Mongla,” said an optimistic Imran.

Upon completion of the base, the parts of ships would be fitted there, no matter how big these ships are in size, he added.

Bangladesh Navy, Coastguard, BDR, BIWTA, BIWTC, Roads and Highways Dept, PDB, WDB, BADC, sugar mills, Mongla and Chittagong Port Authorities, Khulna and Dhaka city corporations, Bangladesh Railway, different autonomous organisations and private ship owners are now the main customers of the KSY.

Local company to invest $14.78m in Karnaphuli EPZ

http://nation.ittefaq.com/issues/2009/11/02/news0459.htm

Local company to invest $14.78m in Karnaphuli EPZ

Business Report

A Bangladeshi company, Vancot Limited, will invest US$14.78 million to expand its garment manufacturing unit in the Karnaphuli Export Processing Zone.

The company will create employment opportunity for 5,927 Bangladeshi workers and 15 foreign nationals, a BEPZA press release said.

An agreement to this effect was signed between Bangladesh Export Processing Zones Authority (BEPZA) and Vancot Limited in BEPZA Complex here today.

Md Moyjuddin Ahmed, member (Investment Promotion) of BEPZA and Mridul Chakraborty, Managing Director of Vancot Limited, signed the agreement on behalf of their respective organizations.

Among others, Brig Gen Jamil Ahmed Khan, Executive Chairman, AKM Mahabubur Rahman, member (Finance), Md Shawkat Nabi, Secretary, AZM Azizur Rahman, General Manager (Investment Promotion) and other officials of the BEPZA were present at the signing ceremony.

Shipbuilders hope for comeback

http://www.thedailystar.net/newDesign/news-details.php?nid=112178

Shipbuilders hope for comeback

Sohel Parvez

Bangladeshi shipbuilders look to better days as Ananda Shipyard and Slipways has recently received signals about a revival of its ‘frozen’ orders from buyers, the chairman of the company said yesterday.

“It’s a relief. We have come out of a big problem. Orders for making four vessels, which were suspended earlier, have been revived recently,” said Abdullahel Bari, chairman of Ananda, one of the largest shipbuilders in the country.

“We also expect to get a go-ahead to start construction for 10 vessels, whose orders were held up earlier,” he told The Daily Star by phone.

Bari’s expectation about a possible recovery from troubled times came after his company held discussions with agents of the buyers during the visit of a German business delegation to Bangladesh last week.

The delegation, comprising representatives from shipping companies, not only raised hopes for Ananda but for other shipbuilders as the mission, especially its leader Peter Clasen, praised skills of local shipbuilders, their openness to adopt modern technology and cost effectiveness.

Bari said Ananda was the victim of global recession that had earlier dried up demands for new ships and prompted cancellation of previously placed orders in shipyards including in Bangladesh.

Ananda fell in trouble after one of its German buyers Wessels Reederei GmbH & Co in May cancelled some $42 million orders for making four ships of 5,500 DWT (deadweight tonnage) capacities.

Bari said Wessels had placed orders for making six vessels of about $65 million.

The shipyard, which has already exported eight vessels, witnessed a holdback in orders for constructing 10 vessels of about $169 million for German buyers due to financial turmoil.

Referring to the discussions with the buyers during the visit of German delegation, the Ananda Shipyard chairman said the company representatives would visit Germany to finalise issues relating to beginning works for vessels, orders of which were kept on hold.

He blamed recession for a dip in the flow of new orders but expected that more orders from Germany would come in the months ahead as the business delegation found good quality of ships made in Bangladesh.

“We also expect to receive orders for making six new vessels with about 2,000 DWT capacity each,” said Bari.

Since 2005, two local shipbuilders — Ananda and Western Marine Shipyard — received orders for more than 40 vessels worth about $600 million from buyers including those from Denmark and Germany.

Md Saiful Islam, chairman of Western Marine Shipyard Ltd, also expected a boost in getting new orders from Germany following the latest visit of the delegation.

“They have shown keen interest in our shipbuilding industry because of our technical know-how, cheap labour and communication skill compared with those in other Asian countries,” said Islam.

“If political situation remains stable, we expect to receive orders worth about half a billion dollars within the first quarter of next year,” he said.

sohel@thedailystar.net

German cos eying more ships from Bangladesh

http://www.newagebd.com/2009/nov/01/busi.html#6

German cos eying more ships from Bangladesh
Bdnews24.com . Dhaka

A German business delegation, which left Dhaka Friday, has shown keen interests in buying more ships from Bangladesh.

Peter Clasen, head of the 21-strong group that visited the country from Oct 25-30, said Bangladesh offered skilled but cheaper ship building compared with China, India and Vietnam.

Local ship builders have said Bangladesh could fetch up to $1 billion in ship orders if the country could increase the number of ship building yards to six from the present two.

‘Bangladesh has huge potential in its ship building industry. Its labourers are skilled and cheaper than those in China, India and Vietnam,’ Clasen told bdnews24.com before leaving Bangladesh.

‘We are very much interested in buying ships from Bangladesh, which could turn into a production base in South Asia,’ he said.

Clasen also termed Bangladeshi carpenters ‘world class’.

German business leader sees Dhaka emerging as top global shipbuilder

http://www.thefinancialexpress-bd.com/2009/10/26/82567.html

German business leader sees Dhaka emerging as top global shipbuilder

FE Report

Bangladesh will be a major player in global shipbuilding industry as it can make quality ocean-going ships at the most competitive price, a German business leader said Sunday.

“International buyers are increasingly placing orders to build ships in Bangladesh,” said Peter Clasen, head of a German delegation visiting the country, at a meeting at Meghnaghat in Narayanganj.

“The reasons are simple: Bangladeshi companies can build ships at a cheaper rate than other nations and can also maintain high quality,” Clasen told a gathering at Ananda Shipbuilders and Slipways, the country’s pioneering vessel maker.

Mr. Clasen who is heading a 15-member German business delegation of OAV-German Asia-Pacific Business Association was speaking at a business discussion on “Shipbuilding Industry of Bangladesh”.

The team also comprises major shipbuilders of the Europe’s largest economy and is expected to hold talks with local shipbuilders and visit their shipyards during its four-day tour.

Mr. Clasen said high number of participants from the shipping companies and shipbuilding industry in the delegation illustrates the existing interest of the German firms in Bangladesh’s emerging sector.

He said German companies operate with long-term perspective including transfer of technology and know-how and involvement of local partners in value addition.

“Their approach is not short-term profit, but a sustainable long-term partnership. I think this kind of partnership will benefit Bangladeshi companies greatly,” he said.

“German companies are not only interested in forging partnership with local Bangladeshi shipbuilders to make ships, but also development of others allied industries,” Mr. Clasen added.

Shipping Minister Shajahan Khan said Bangladesh has demonstrated its ability in building quality ships of international standard at a short span of time.

“The shipbuilding sector would be the flagship of the country’s economy like ready-made garments within years,” Khan said.

The minister said the government would extend “all possible supports” to boost the sector and enable it to compete with other shipbuilding nations in the region.

“Bangladesh will very soon play a leading role in the global shipbuilding market. We are ready to lend all our support to foster its growth,” he said.

Mr. Shajahan admitted that Bangladesh lacks shortcomings in terms of technological excellence and research. “But I hope these hurdles would be overcome with the transfer of appropriate technologies from western nations.”

The shipping ministry has been playing an advocacy role in reducing the cost of financing of the sector as the ongoing global economic crisis has adversely affected the country’s shipbuilders, the minister added.

Abdullahel Bari, chairman of Ananda Shipyard, said the government should give 30 per cent incentive for the next five years to help the local entrepreneurs fight with their regional competitors.

The bank interest rate should also be lowered, he said.

Mr. Bari told the gathering his company has already handed over seven ocean-going ships to the clients from Denmark and Mozambique and is now preparing to hand over another new vessel to a Danish buyer.

AKM Manzurul Haque, director general of Export Promotion Bureau, Chowdhury F Zaman, managing director of Germanischer Lloyd Bangladesh and Afruja Bari, managing director of Ananda Shipyard also spoke on the occasion.

German delegation seeks shipbuilding partnership

http://www.thedailystar.net/newDesign/news-details.php?nid=111332

German delegation seeks shipbuilding partnership
Star Business Report

A visiting German business delegation yesterday expressed its interest in forming a sustainable, long-term partnership in shipbuilding and other sectors in Bangladesh.

“German companies operate with long-term perspective, including transfer of technology and know-how and involvement of local partners in value creation,” said Peter Clasen, head of the visiting delegation of OAV-German Asia-Pacific Business Association.

“Their approach (German companies) is not short-term profit but a sustainable long-term partnership,” he said.

The statement came at a seminar on shipbuilding industry at the country’s biggest shipbuilder Ananda Shipyard and Slipways Ltd (ASSL) at Meghnaghat on the outskirts of the capital.

Citing cooperation between Komrowski Group, a Hamburg-based trading and shipping company, and Ananda Shipyard, Clasen said: “We wish further cooperation between Bangladesh and Germany in shipbuilding and related industries.”

The German delegation arrived in Dhaka yesterday on a weeklong trip to explore business opportunities in shipbuilding, energy, engineering and textiles in Bangladesh.

Shipping Minister Shajahan Khan and German Ambassador in Bangladesh Holger Michael were present at the programme chaired by ASSL Chairman Abdullahel Bari.

Khan said his ministry had attached utmost attention to the development of shipbuilding. “Bangladesh has demonstrated its skills in building ships of international standards,” he said.

In the past several years, two local shipbuilders ASSL and Western Marine Shipyard Ltd bagged orders for making more than 40 vessels of about $600 million mainly from European buyers.

ASSL has handed a couple of ships to its buyers in Denmark and Mozambique.

Discussants at the seminar observed that Bangladesh has the capacity to tap the global shipbuilding market as it can provide skilled and semiskilled workers at low-cost compared to other shipbuilding nations.

Operators said about 200 shipyards and workshops, employing about 100,000 skilled and semiskilled workers, are in operation to meet demand of the riverine country, offering a cheaper man-hour than any other shipbuilding country.

The industry estimates that ships built in Bangladesh would be about 15-20 percent cost competitive compared with the countries such as India, China, Korea and Singapore.

“I would like to convey my message through the German delegation to Europe and to the maritime world that Bangladesh would play a potential role in the global export shipbuilding market in coming years,” said the minister.

“The government will extend all support enabling the sector to thrive with quality and compete with other ship exporting countries,” Khan said.

He urged the developed nations to transfer technology to Bangladesh, which will develop the sector.

Korean team visits shipyard in Chittagong

http://www.theindependent-bd.com/details.php?nid=146050

Korean team visits shipyard in Chittagong
STAFF CORRESPINDENT, CHITTAGONG

Oct 15: A four-member team of Korea’s Advanced Ship Engineering Research Centre (ASERC) at the Pusan National University which has the world’s most modern and comprehensive research facility on ship designing visited Western Marine Shipyard Ltd.

ASERC Director Prof. H.H. Chun led the delegation. Other members of the team are Professor Sung Won Kang and Professor Je Myung Lee of Pusan National University.

Expressing his deep satisfaction over the shipbuilding capabilities of Bangladesh, HH Chun said that he will put forward the proposals of the Bangladeshi shipbuilders to the Korean investors to boost bilateral relations between the two countries through business collaboration.

HH Chun also said that he would explore the opportunities to offer scholarship to students of Naval Architecture and Marine Engineering Department of Bangladesh University of Engineering and Technology (BUET) to conduct their research in ASERC on ship designing.

M.A. Mobin, Director, Western Marine Shipyard welcomed the delegation at the shipyard. He also praised the active co-operation of the various Bangladesh ministries, banks, media, and foreign investors in the development of the shipbuilding industry in Bangladesh.

Dhaka Zonal General Manager of Daewoo International Corporation H.S. Kim, Country Manager of Germanischer Lloyd in Bangladesh Mr. C. F. Zaman and Country Manager of Bureau Veritas, Bangladesh Md. Harunor Rashid accompanied the delegation during the visit.

Currently, the Western Marine shipyard has confirmed orders for 18 international ocean-going vessels which include 5 X 4100 DWT Ice-class container vessels for Denmark, 12 X 5200 DWT Multi-Purpose Cargo vessels for Germany and 1 X Floating Reception vessel for a Finish buyer.

Korean team visits Western Marine Shipyard

http://nation.ittefaq.com/issues/2009/10/14/news0688.htm

Korean team visits Western Marine Shipyard

Business Report

A 4-member team of Korea’s Advanced Ship Engineering Research Center (ASERC) at the Pusan National University, which has the world’s most modern and comprehensive research facility on ship designing, visited Western Marine Shipyard Ltd on Tuesday.

ASERC Director Prof. H.H. Chun led the delegation. The other members include Prof. Sung Won Kang and Prof. Je Myung Lee from Pusan National University, and Dr. Mizanur Rahman from ASERC.

Dhaka Zonal General Manager of Daewoo International Corporation, H.S. Kim, Country Manager of Germanischer Lloyd in Bangladesh, C. F. Zaman and Country Manager of Bureau Veritas, Bangladesh, Md. Harunor Rashid will join the delegation team during the visit.

The visit was a part of the team’s Bangladesh tour aiming at the initiation of academic and research collaboration with the Department of Naval Architecture and Marine Engineering of BUET and provision of academic scholarship to naval architectures and engineers to Korea.

The visiting team also examined the current status of Bangladesh’s emerging shipbuilding industry, which will determine business collaboration among Bangladeshi and Korean investors.

Currently, the Western Marine shipyard has confirmed orders for 18 international ocean-going vessels which include 5 X 4100 DWT Ice-class container vessels for Denmark, 12 X 5200 DWT Multi Purpose Cargo vessels for Germany and 1 X Floating Reception vessel for a Finis buyer.

Good times for local shipbuilding

http://www.thedailystar.net/newDesign/news-details.php?nid=109296

Good times for local shipbuilding

A labourer works at the Western Marine shipyard in Chittagong. Western Marine, along with the other main firm Ananda Shipbuilders based in Narayanganj, have in the past two years signed deals to build 50 ships worth $600 million. Photo: AFP

Afp, Chittagong

When Bangladeshi labourer Abdul Karim was laid off from his shipbuilding job in Singapore because of the global recession, he did not expect to find the same sort of work at home.

But the 35-year-old, like similarly skilled shipbuilding labourers who have worked abroad, returned six months ago to find the industry booming and his expertise much in demand.

“My salary is about 40 percent lower than it was in Singapore, but overall I’m better off in Bangladesh and I get to stay close to my family,” said Karim, who now earns around 300 dollars each month.

Bangladesh is better known for shipbreaking — dismantling of old vessels — but now, just a few kilometres (miles) north of the shipbreaking yards, men like Karim are creating new ocean-going ships.

And experts say it is a safer, less environmentally damaging industry that can create hundreds of thousands of jobs.

“Bangladesh’s garment industry became big because it was cheaper here to make clothes than anywhere else in the world,” said Sakhawat Hossain, chief executive of Western Marine, one of the main shipbuilders.

“The same thing is now happening with shipbuilding. European buyers are flocking here. If more building yards emerge, we can take orders worth a billion dollars a year by 2015.”

Hossain said Bangladesh had become a natural destination for shipbuilding because costs in other countries had become too high.

His firm once built cargo boats and ferries for inland and coastal waters but it graduated into ocean-going shipbuilding three years ago and has enough orders until 2012 from Denmark, Germany and Norway.

He estimates that one in four of his 1,600 employees has recently returned from shipbuilding yards abroad, most after losing jobs through cuts due to contract defaults and delayed orders amid the recession.

He wants to hire another 2,500 welders, fitters and foremen in the next few months.

“The layoffs in other countries are a gain for us,” Hossain said. “It’s win-win, we benefit from their knowledge abroad and they get a decent salary at home.”

Western Marine, along with the other main Bangladeshi firm Ananda Shipbuilders, have in the past two years signed deals to build 50 ships worth 600 million dollars.

All are on the small side of the business, but that is where Bangladesh has an advantage, according to Hossain.

“Top global shipbuilders are not interested in making smaller vessels that weigh less than 20,000 dead weight tonnage because of high labour cost and shrinking profit.”

If this trend continues, Bangladesh, with its experience of building vessels to traverse the delta nation, could emerge as a shipbuilding hub.

“Shipbuilding is in our blood. Our workers have been building boats for centuries and now tens of thousands of them work in shipyards across Asia,” said Khabirul Haque Chowdhury, a naval architecture professor at Bangladesh University of Engineering and Training.

He said that unlike the controversial shipbreaking industry, shipbuilding is environmentally safe, and could help the poor nation of 144 million people become a middle income country.

“Building ships is like building a city. When it grows, dozens of other industrial sectors such as painting, furniture, steel and electrical equipment also grow,” he said.

The programme coordinator of the Danish Embassy’s business-to-business programme, Morten Lynge, said European companies that placed the first orders in 2007 took a huge gamble, but it appeared to have paid off and the industry was showing big potential for the future.

“We have estimated that some 55 percent of the world’s small ships are aged over 20 years, meaning they need to be replaced within the next few years. I think Bangladesh will be the largest beneficiary,” said Lynge, who is hosting 23 Danish vessel makers in Bangladesh next month to explore joint ventures.

Although Bangladesh has so far been largely immune to the effects of the global economic crisis, the shipbuilding business has felt a small slowdown with a German firm cancelling orders for four ships worth 42 million dollars.

“We can win back the orders once the global economy turns around,” said Ananda Shipbuilders owner Abdullahel Bari.

“Western companies will definitely come here. Bangladesh will be a major shipbuilder,” he said, but he warned the government needed to invest in gas and electricity for the potential to be realised.

Subhash Moydey, an engineer who has recently returned to Bangladesh after 30 years working at yards across the globe, is optimistic.

“When I started in Singapore it was a small business. Until the economic crisis it was booming,” the 55-year-old said.

“I predict the same story for my country. We have the workers to power the boom. I can already see it beginning to happen.”

20 Danish companies look to partnership

http://www.thedailystar.net/newDesign/news-details.php?nid=108927

20 Danish companies look to partnership
Star Business Desk

A Danish delegation is expected to visit Bangladesh on November 8-13 to introduce them to relevant local industries to explore the possibilities of setting up long-term joint ventures.

The delegation will consist of delegates from about 20 Danish companies that are mostly active in the production of components and services required for shipbuilding and similar industries. A few other companies in fishery are also on the list.

Possible cooperation will be over Danish know-how and investments that will be combined with local knowledge and manpower skills, the Danish embassy in Dhaka said in a statement yesterday.

“Shipbuilding is a great opportunity to create jobs, diversify exports and develop Bangladesh. We strongly believe in the potential of the country’s shipbuilding industry and also the fishery and food processing sectors,” said Einar Hebogård Jensen, Danish ambassador.

“I have followed the shipbuilding industry in Bangladesh with great interest for the last three to four years and was pleased when the first vessel meeting international standards was produced in Bangladesh and handed over to a Danish company last year,” he said in a study on the shipbuilding sector in Bangladesh.

According to the baseline study done by the embassy, 10 Bangladeshi shipyards are expected to be capable of building high quality international classed ships of up to 10,000 DWT within a year or two.

Two shipyards have already made it on the international scene and have at present around 50 vessels in their order books from Danish, German, Dutch and Finish buyers, while the size of the contracts are around of $500 million and a memorandum of understanding has been signed for an additional $200 million.

“I strongly believe in combining Danish know-how with Bangladeshi low labour costs and hard work in joint ventures or other forms of strategic partnerships. This will give Bangladeshi companies the possibility to acquire the necessary skills and experience to supply the shipbuilding industry,” added the Danish ambassador.

The main strengths of Bangladeshi shipbuilding are its long history of maritime activity, the presence of favourable geographical advantages, the presence of a low-cost shipbuilding workforce and industry-related educational and training institutes, according to the study.

Significant government focus is placed on aiding the shipbuilding industry — green channels for duty free market access and easy importation facilities have been created and a tax holiday is in the making, the study finds.

Bangladesh is believed to be 15 percent cheaper in building small ocean-going vessels than main competitors like Vietnam, primarily due to low labour costs, the study said.

At present, Bangladeshi companies can manufacture around 40 percent of the components for vessels built for local demand.